Slide 1: Q3 2022 Investor Presentation
Q3 2022Investor Presentation
Slide 2: Disclaimer
Disclaimer 1 Safe Harbor Disclaimer for Forward-Looking Statements This presentation has been prepared by management of System1, Inc. (together with its subsidiaries, collectively “System1”) and does not constitute a prospectus, and should under no circumstances be understood as an offer to sell or
Slide 3: Disclaimer (Continued)
Disclaimer (Continued) 2 Explanatory Note For financial reporting purposes, S1 Holdco has been determined to be the accounting predecessor and therefore its financial results are presented for all periods prior to the Business Combination with Trebia. In order to present comparable financial informa
Slide 4: Company Overview
Company Overview 3
Slide 5: System1 is a leading omnichannel customer acquisition marketing platform
System1 is a leading omnichannel customer acquisition marketing platform, delivering high intent customers to advertisers and to our own subscription products. 4
Slide 6: System1 At a Glance
Deliver high intent customers at scale Spend $675M+ annually (first half of CY ‘22 run-rate) on digital advertising across all major sources of customer traffic $900-$930 Million projected 2022 revenue Diversified across 40+ major advertising categories, and 2mm+ paying subscribers to our digital su
Slide 7: Key Financial KPIs
Key Financial KPIs 6 2.3M+ Active subscribers across Owned & Operated subscription products $74M Q2 2022 Gross Profit (+31% YoY) $160M FY 2022 Adjusted EBITDA forecast (+25% YoY) Note: FY 22 Adjusted EBITDA forecast assumes midpoint of Company’s most recent guidance provided on August 11, 2022.
Slide 8: Fast Growing & Profitable
2020 2021 2022E Fast Growing & Profitable 7 2020 2021 2022E Combined Revenue $ in millions $567 $833 $9151 27% CAGR Adjusted EBITDA $ in millions $63 $127 $1601 60% CAGR Note: See Appendix for a reconciliation of non-GAAP metrics to comparable GAAP metrics. (1) Assumes midpoint of Company’s most rec
Slide 9: RAMP Identifies & Generates Customers Across All Major Advertising Categories
RAMP Identifies & Generates Customers Across All Major Advertising Categories & from All Major Traffic Sources 8 Platform Revenue by Vertical Note: All metrics shown are for the twelve months ended June 30, 2022 reflect the combined results of S1 Holdco LLC and Protected.net Subscription Health Fina
Slide 10: RAMP is built for scale
175M+ monthly visitors1 generating ~450M monthly sessions1 6B+ rows/day2 generated from first- party data informing our Machine Learning pipelines ~22M daily creative & bidding optimizations2 by our automated buying engine ~600M queries/mo. 1 powering our search stack processes across O+O and partne
Slide 11: RAMP Platform Architecture
RAMP Platform Architecture 10 Application Layer RAMP Console System1 and Network partner access to the RAMP platform, including campaign management, experimentation tools and reporting dashboards. Platform Layer Data Layer Acquisition Paid and organic traffic acquisition services & APIs. Engagement
Slide 12: How RAMP Works
How RAMP Works Identify and unlock consumer intent across all major sources of traffic 11 UNLOCK REFINE 2 MONETIZE 3 1 Refine consumer intent based on actions they take on System1 websites Monetize via advertising networks or our O&O subscription products etc. display ads 40 O&O Websites
Slide 13: REFINE
REFINE 12 Consumer intent is shaped into search intent by multiple interactions users take on our O&O sites
Slide 14: Our Technology Moat Widens as our Business Grows
Our Technology Moat Widens as our Business Grows 13 Omnichannel Vertical Agnostic Privacy Focused 1st Party Data End-to-End Tech Stack Plug & Play M&A Highly Efficient Customer Acquisition More Customer Traffic Data-Driven Optimization Better Conversion Higher Monetization & Profits Closed-Loop Attr
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Slide 16: Advertising Growth Drivers
Advertising Growth Drivers 15 Continuous advertising & monetization optimizations that drive margin improvement Expand customer acquisition efforts into under indexed and new acquisition channels Grow & expand international business, currently less than 20% of platform advertising revenue Ad Rev. by
Slide 17: Subscription Growth Drivers
Su b sc ri b er s (M M ) New Privacy Product New Product New Product 0 1 2 3 4 5 6 7 8 9 10 2018 2019 2020 2021 Subscription Growth Drivers 16 Continue to test / optimize for increased renewal rates and higher ARPU Expand customer acquisition efforts via RAMP integration Launch & grow new subscripti
Slide 18: M&A remains a Core Part of our Growth Strategy
M&A remains a Core Part of our Growth Strategy 17 Growth Focus on proprietary deals & growth synergies Accelerate Accelerate existing business lines Plug & Play RAMP is built to facilitate “Plug & Play” integration of M&A Expand Enter adjacent business markets
Slide 19: Strong and Experienced M&A Track Record
Strong and Experienced M&A Track Record 18 Growth Plug and Play Accelerate Expand Answers.com RoadWarrior CouponFollow Protected.net MapQuest Concourse Media Startpage info.com Qool Media InfoSpace
Slide 20: A Founder-led Team of Industry Veterans
A Founder-led Team of Industry Veterans 19 MICHAEL BLEND CEO & Co-Founder TRIDIVESH KIDAMBI CFO PAUL FILSINGER President BETH SESTANOVICH Chief People Officer JEN ROBINSON CTO BRIAN COPPOLA Chief Product Officer DANIEL WEINROT General Counsel
Slide 21: Financial Performance
Financial Performance 20
Slide 22: Financial Highlights
Financial Highlights 21 A diverse business model generating revenue across consumer-oriented verticals through advertising and subscriptions. Strong and consistent organic growth, our RAMP platform enables continuous optimizations driving operating leverage. Strong and Experienced M&A track record,
Slide 23: Fast Growing & Profitable
Fast Growing & Profitable 22 $567 $833 $9151 $206 $220 2020 2021 2022E Q2 21 Q2 22 $133 $213 $2901 $56 $74 2020 2021 2022E Q2 21 Q2 22 27% CAGR 7% YoY 48% CAGR 31% YoY 60% CAGR 20% YoY Combined Revenue $ in millions Adjusted Gross Profit $ in millions Adjusted EBITDA $ in millions Note: See Appendix
Slide 24: Historical Financial Data
Historical Financial Data 23 $ in millions Note: See Appendix for a reconciliation of non-GAAP metrics to comparable GAAP metrics. $ i millions 2020 2021 Q2 21 Q2 22 Combined Revenue Owned & Operated Properties $438 $653 $161 $164 Network Partners $38 $36 $9 $13 Advertising Total $476 $688 $170 $177
Slide 25: Investment Highlights
Investment Highlights 24 A fast growing and profitable business. Proven M&A capabilities with a strong track record. Proprietary RAMP platform provides a strong and sustainable competitive advantage. A highly diversified business across its marketing and monetization capabilities. Strong, industry-e
Slide 26: Thank you
SYSTEM Thank you
Slide 27: Appendix
Appendix 26
Slide 28: Reconciliation of Net Income to Adjusted EBITDA – FY 2020 and FY 2021
Reconciliation of Net Income to Adjusted EBITDA – FY 2020 and FY 2021 27 $ in millions$ in illions $ in millions 2020 2021 Net Income (Loss) $16 $33 Plus: Income Tax Expense $2 $1 Interest Expense $24 $17 Depreciation & Amortization $14 $14 Other Expense $0 $0 Stock-Based Compensation & Distribution
Slide 29: Reconciliation of Revenue to Combined Revenue and Adjusted Gross Profit – FY 2020 and FY 2021
Reconciliation of Revenue to Combined Revenue and Adjusted Gross Profit – FY 2020 and FY 2021 28 $ in millions $ in millions $ in millions $ in millions 2020 2021 Revenue $476 $688 Plus: Unaudited Protected.net Revenue $91 $145 Combined Revenue $567 $833 Less: Cost of Revenue (exclusive of depreciat
Slide 30: Reconciliation of Net Income to Adjusted EBITDA – Q2 '21 and Q2 '22
29 $ in millions $ in millions $ in millions Reconciliation of Net Income to Adjusted EBITDA – Q2 ’21 and Q2’ 22 $ in millions Successor Predecessor System1, Inc. S1 Holdco LLC Period from Period from April 1, 2022 through June 30, 2022 April 1, 2021 through June 30, 2021 Net Income (Loss) ($34) $12
Slide 31: Reconciliation of Revenue to Combined Revenue and Adjusted Gross Profit – Q2 '21 and Q2 '22
Reconciliation of Revenue to Combined Revenue and Adjusted Gross Profit – Q2 ‘21 and Q2 ‘22 30 $ in millions $ in millions $ in millions Successor Predecessor System1, Inc. S1 Holdco LLC Period from Period from April 1, 2022 through June 30, 2022 April 1, 2021 through June 30, 2021 Revenue $220 $170